Cities, Grids, and RE: A Meeting with Gerhard Stryi-Hipp

My final meeting at Fraunhofer ISE on August 12 was with Gerhard Stryi-Hipp. Mr. Stryi-Hipp is Fraunhofer ISE’s Coordinator for “Smart Energy Cities,” Fraunhofer ISE’s Head of Energy Policy, and President of the European Technology Platform on Renewable Heating and Cooling. He has worked on renewable energy and Smart City projects both domestically and internationally.

(Note: The following interview is not a direct transcript. It is written by me, Priya Donti, based on notes I took during the meeting. The images featured were presented to me during the meeting. The interviewee reviewed this writeup before its publication.)

Priya: What is your definition of Smart Grid or Smart City?
Mr. Stryi-Hipp: There’s no clear definition. I would say Smart Cities are the way to improve quality of life in cities using technology such as information and communications technology (ICT). However, different companies and societies have different definitions, leading to different implementations. In the US, Smart Cities are mainly driven by ICT, monitoring, and big data. In Europe, the push for Smart Cities came from a combination of energy, transport, and ICT. In fact, we don’t use the term “Smart City” in Germany, but instead “City of the Future” (Zukunftsstadt) or “City of Tomorrow(Morgenstadt). Smart Cities were initially seen as more of a technology project disconnected from the Energiewende, but now awareness of the ICT aspect is growing and they’re viewed mainly from the perspective of energy transition. In India, Smart Cities are seen as solutions to all types of problems: transport and energy, but also waste, security, economic development, labor, etc. In China, Japan, and South Korea, the push is mainly ICT-driven. They look at the optimization of transport and traffic, and private homes have more ICT. In general, we want more renewable energy everywhere, but the approach needs to be adapted to different on-site concerns. For instance, Freiburg is growing slightly, other German cities are stagnating in population, and Asian cities are growing fast.

Priya: How much can you tell me about KomMod, your modeling tool that calculates optimized target energy systems for cities and regions? What are its inputs and outputs?
Mr. Stryi-Hipp: Achieving ambitious renewable energy goals is challenging due to fluctuating sources. Biomass can replace conventional energy sources, but it’s often too limited to accommodate heat, electricity, and transport. It’s therefore clear that solar and wind are the main renewable sources everywhere. As we approach larger shares of renewable energy in a particular place, we need more details about what the future energy system will look like to avoid making stranded investments.
….On a high level, we take a look at the current energy system and model to figure out the ideal energy system in some future year. Then, we can look backwards to figure out our action plan (Figure 1).

KomMod1

Figure 1: A high-level view of what KomMod does. Image taken from [1].

….To figure out this ideal energy system, we need to optimize heat, energy, and transport for each hour of the year. For this, we need to calculate the area’s potential renewable energy portfolio by looking at factors such as irradiation, wind velocity, land availability for installing wind mills and solar modules, and growing biomass. We also need to know particular technologies’ efficiency, system size, and costs. We need to know future energy demand, which can be predicted from current demand using development factors. Finally, we take in information about batteries and energy import/export potential. These aspects and couplings are then coded into many equations and put into KomMod’s mathematical solver. KomMod designs the energy system that makes the supply equal the demand for each hour of the year, looking at what is physically possible and identifying the version with minimized costs over the entire year (Figure 2).

Figure 2: A more detailed look into how KomMod works.

Figure 2: A more detailed look into how KomMod works. [2]

Priya: Are any simplifications necessary to make the solver work?
Mr. Stryi-Hipp: Fraunhofer ISE basically constructs the large number of equations reflecting the physical and economic structure of the energy system. We’re not involved in the mathematical solver itself.

Priya: In one of your presentations, you mentioned that the energy systems of our countries “are partly hampered by energy monopolies” [3]. How does that apply in Germany? How can it be fixed?
Mr. Stryi-Hipp: It’s the case everywhere that energy sector companies want to increase their market share with the tendency to become monopolies, but monopolies are not efficient or effective. The energy market is complex, though. Infrastructure is expensive, and it doesn’t make sense to build two parallel sets of grids. So how do we build infrastructure without discriminating against new technology or actors? A lot of it isn’t up to the free market. For example, we have a liberalized electricity market, but the grid is very regulated in Germany. The grid operator needs to go through the regulator to determine its own costs and get the grid fee approved, and the profit of the company can’t exceed a certain amount. In the energy generation sector, big companies and utilities that once ran conventional plants are losing market share, since the EEG gave renewable energy plants priority. In Germany, we actually produce more power than needed, and we export it. As a result, some utilities want to close some old power plants, but need to ask regulators first due to system stability and security concerns. This discussion shows that although the energy transformation has a lot of free market aspects, a lot of regulation is also necessary.

Priya: I saw in your presentation on Taiwan’s energy transition that making the grid smarter was viewed as a separate plan from replacing renewables with conventional energy. Is it generally viewed that way? It is possible to get to 100% renewable energy without Smart Grids?
Mr. Stryi-Hipp: It’s very clear that if we talk about a 100% renewable or decarbonized energy system, it has to be smart. However, as you can see in this presentation about Frankfurt’s energy transition, there’s a priority order. We need to work on efficiency, and our goal is to get a 50% reduction in demand. It’s ambitious, but doable. At the same time, we need to maximize a city’s use of local renewable energy sources. Third, medium-sized and large cities like Frankfurt must cooperate with their regions due to renewable energy potential and space constraints. Smart technologies come fourth, and their relevance is growing with the level of efficiency and renewable energy used. In the first steps, the large-scale developments will be in PV, wind, and biomass. With growing shares of renewable energy, it has become more important to use Smart Grids/demand side management and balance energy import and export with the amount of storage. There’s no reason for a city to become disconnected or autonomous to achieve 100% renewable energy in a developed country.

Priya: Can you tell me about your criteria for choosing cities for the Morgenstadt project?
Mr. Stryi-Hipp: In this project, we wanted to identify ambitious “smart” cities to understand their structure, approaches, and successes. We identified the smartness of a city by looking at indicators in different sectors — for example energy, transport, ICT, security, governance, production and logistics, and buildings. We tried to find cities that had ambitious goals in one or two sectors, or that had realized some ambitious projects. In this project, we identified that although the framework conditions are often different in these cities, the factors for success are often the same. Success depends for example on government structure, having an innovative leader, and having an innovative framework.
Priya: Can you go into more detail about these common success factors? For example, did successful structures have citizen participation?
Mr. Stryi-Hipp: It’s a long story. Citizen participation can play an important role, but it depends on culture and political framework. For instance, Singapore is active in Smart Grids and ICT, but everything is done by the government. It’s a top-down structure, and the government tests and implements these technologies. The government informs the people and the society usually follows what the government proposes. It’s similar in Japan. In Germany, though, there is a lot of discussion, for instance about the power lines crossing the country or the costs and data security of smart meters.

Priya: In one of your presentations on the support scheme for PV and battery systems, you mentioned: “The battery must be integrated in a ‘grid-beneficial’ way => the maximum PV power fed into the grid must be limited to 60% of the nominal power of the PV system” [4]. How does that work?
Mr. Stryi-Hipp: There are two different models for how a combined PV and battery system integrated into the grid can be operated (Figure 3). In the first model, a homeowner first covers their own demand with their PV system, charges their battery with the excess energy their PV system produces (for electricity use at night), and then feeds energy into the grid when their battery is completely charged. This model is bad for the grid because there’s no feed-in until, say, 10am. In the second model, the homeowner first feeds energy into the grid until reaching some pre-determined percentage cap, and then uses the rest of the energy to charge their battery. This second alternative is optimized for system stability by better distribution of feed-in time, reducing the maximum capacity of feed-in electricity and therefore allowing us to connect more PV capacity.

From [3].

Figure 3: The two models for the integration of a PV/battery system in to the grid. Image taken from [4].

Priya: What happens if the homeowners have reached the feed-in cap and their battery is full? Does the extra energy get dissipated?
Mr. Stryi-Hipp: Yes, but you would ideally balance and design the PV system, battery, and your electricity demand so that this dissipation isn’t necessary.

Priya: In the same presentation, you mention: “There is a strong debate how the electricity rate increase due to renewable energies can be stopped” [4]. What are your thoughts?
Mr. Stryi-Hipp: That’s a difficult question. In Germany, there’s a 6¢/kWh EEG bonus, and on average 20% of the electricity price people pay is due to the renewable energy subsidy. This payment is for capacity that has already been installed, so we can’t change it now, but the payments will end automatically after the payment time of 20 years for each renewable energy plan. But what happens with new installations? PV installation was at 7-8 GW per year, which was seen as too high. Therefore, the government set a target of 2.5 GW per year and reduced the feed-in tariff for PV. But the tariff was too low and the German market overreacted negatively, now growing at only 1 GW per year.
….
It’s clear that the overall electricity cost must be limited and an unlimited rise of annual renewable energy installation capacity is not sustainable. That being said, Germany is often used as a negative example against the EEG, and that’s not fair. The price for PV installation is now not as high as it initially was in Germany, so Germany’s amount of electricity price rise won’t happen in other countries with today’s PV costs.

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[1] Stryi-Hipp, Gerhard. “New tools for the development of Sustainable Energy Systems for Cities & Regions.” (2015). Link. [back]
[2] Stryi-Hipp, Gerhard. Received via email on August 20, 2015. [back]
[3] Stryi-Hipp, Gerhard. “How a sustainable energy supply can be achieved — the concept of the German »Energiewende«.” (2014). Link. [back]
[4] Stryi-Hipp, Gerhard. “Update on the German PV support scheme and its influence on the PV market structure.” (2014). Link. [back]

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